Corporate Social Responsibility and the Market Reaction to Negative Events: Evidence from Inadvertent and Fraudulent Restatement Announcements

2019 ◽  
Author(s):  
Eli Bartov ◽  
Antonio Marra ◽  
Francesco Momente'
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Market Reaction ◽  
Negative Events ◽  
Corporate Social

Corporate social responsibility, market reaction and accounting conservatism

Kybernetes ◽  
2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xixi Shen ◽  
Kung-Cheng Ho ◽  
Lu Yang ◽  
Leonard Fong-Sheng Wang
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Information Disclosure ◽  
Market Reaction ◽  
Financial Information ◽  
Accounting Conservatism ◽  
Estimation Methods ◽  
Financial Policy ◽  
Content Type ◽  
Corporate Social

Purpose Non-financial information disclosure may reflect the quality of corporate financial reports or disclosure policy choices. The authors examine the relationship between corporate social responsibility (CSR) and accounting conservatism and also investigate channels through which such effects are transmitted. The purpose of this paper is to explore how CSR, as non-financial information that has received widespread attention, affects choices regarding corporate financial policy. Design/methodology/approach Using ordinary least squares regression, the authors analyze China CSR Score data for 2010–2018. They control certain influencing variables related to the nature and characteristics of enterprises and discover that CSR can effectively increase accounting conservatism. Then, they extract the components of market reactions to CSR and study the market reaction path of CSR as it affects financial policy. They also conduct a robustness test to ensure that the results are not accidental in a complex environment. Findings The results reveal the influence of non-financial information on firms’ financial policy. In addition, the results confirm the attraction of liquidity and investor attention as the major market reaction channels by which CSR significantly promotes accounting conservatism. Additionally, other critical paths of influence deserve further exploration. The results remain robust for alternate measures of accounting conservatism, different components of CSR, other proxies on CSR, endogenous testing and alternate estimation methods. Originality/value The study represents the first analysis of the influence of CSR information disclosure on accounting conservatism in emerging markets, and it undertakes a preliminary exploration to clarify the mechanism of CSRs’ role in accounting conservatism. The results also provide a policy reference for external supervision and internal governance of enterprises. Thus, the results can help company managers maintain a favorable corporate image and establish a high-level investor protection mechanism.

Can corporate social responsibility deter consumer dysfunctional behavior?

2020 ◽  
Vol 37 (7) ◽  
pp. 729-738
Author(s):  
Alexis M. Allen ◽  
Todd Green ◽  
Michael K. Brady ◽  
John Peloza
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Environmental Protection ◽  
Consumer Perceptions ◽  
Google Trends ◽  
Sense Making ◽  
Negative Events ◽  
Content Type ◽  
Dysfunctional Behavior ◽  
Corporate Social

Purpose The purpose of this paper is to examine how and when a reputation for corporate social responsibility (CSR) can deter dysfunctional consumer behaviors (DCBs) such as shoplifting or negative word-of-mouth (WOM) in response to firm failures. The authors predict that congruency of the CSR activities and the basis for the firm failure (e.g. environmental protection, environmental harm) provides protection for firms while incongruency (e.g. environmental protection, social harm) does not. The authors base this prediction on the process of retroactive attribution and sense-making. Design/methodology/approach Across two studies the research finds support that a reputation for CSR can deter consumer dysfunctional behavior. Study 1 uses an experimental design with a Mturk sample, and a behavioral outcome using an overpayment situation, to examine when consumers will act honestly and recognize overpayment. Study 2 uses secondary data, across three novel data sources (Google trends data, an existing data set of consumer perceptions of CSR and Factiva to uncover press coverage of negative firm events). Study 2 examines how CSR reputation impacts consumers’ participation in negative WOM in response to firm failures. Findings Study 1 finds support for CSR congruency as a protection mechanism against dysfunctional behavior in response to negative events. The authors find that dysfunctional behaviors in conditions of congruency, while incongruent and a control condition do not provide such protections. Study 2 supports these findings using Google trends data in the form of online negative WOM. The authors find that when firms are known for their social performance, negative events in the social domain result in significantly lower levels of negative WOM. Originality/value The current paper makes the novel prediction that consumers will use a current negative event (corporate social irresponsibility) to re-evaluate previous CSR. Thus, in contrast with prior research, the authors argue that a negative event is not affected by previous CSR but that previous CSR is affected by a negative event. Furthermore, the authors posit that the congruency between the transgression and previous CSR moderates consumer perceptions, such that incongruent CSR and transgression contexts lead to increased DCBs through consumers’ retroactive sense-making process.

scholarly journals PENGARUH STRUKTUR KEPEMILIKAN DAN DEWAN KOMISARIS TERHADAP CORPORATE SOCIAL RESPONSIBILITY DAN REAKSI PASAR

2017 ◽  
Vol 17 (3) ◽  
pp. 376
Author(s):  
Dian Agustia
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Significant Influence ◽  
Ownership Structure ◽  
Market Reaction ◽  
Logical Consequence ◽  
Managerial Ownership ◽  
Public Ownership ◽  
Social Legitimacy ◽  
Corporate Social

Implementation of Corporate Social Responsibility (CSR) seems to be a logical consequence of the implementation practice of Good Corporate Governance (GCG). By implementing CSR, companies are expected to acquire social legitimacy and maximize its financial strength in the long term, so that will affect the value of sales of company stock. The purpose of this study is to examine the effect of ownership structure and the number of board of commissioners to disclosure of CSR and market reaction. Ownership structure in this case is the proportion of public ownership and proportion of managerial ownership. This study uses regression analysis. Exogenous variables used in this study is the number of the board of commissioners, public ownership proportion, and proportion of managerial ownership. Endogenous variables are disclosures of CSR and market reaction. The results of t test showed the number of the board of commissioners has a significant effect on the disclosure of CSR, the proportion of public ownership has no significant effect on the disclosure of CSR and the proportion of managerial ownership has no significant influence on the broad disclosure of CSR. The number of the Board of Commissioners has a significant effect on market reaction. The proportion of public ownership has no significant effect on market reaction. The proportion of managerial ownership has no significant influence market reaction. This study also proved that the disclosure of CSR no significant effect on market reaction. Simak

scholarly journals Corporate Social Responsibility, Environmental Pollution, and Stock Market Reaction

2021 ◽  
Vol 14 (1) ◽  
pp. 40-47
Author(s):  
Ya-Fang Wang
Keyword(s):  
Corporate Social Responsibility ◽  
Stock Market ◽  
Social Responsibility ◽  
Environmental Pollution ◽  
Environmental Protection ◽  
Market Reaction ◽  
Market Participants ◽  
Stock Market Reaction ◽  
Corporate Social

Purpose: This paper analyzes whether and how the environmental protection concern of corporate social responsibility companies affects market participants’ perceptions by examining the nature and structure of corporate social responsibility companies.

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